Business Sector Threatens Withdrawal Over Potential Coalition Policies
Image Source: Busisiwe Mavuso
Published by Everything ZA News
Johannesburg, 28 May 2024 – Business Leadership South Africa (BLSA) CEO Busisiwe Mavuso has issued a stern warning that the business sector will withdraw from its partnership with the government if a new ruling coalition includes partners advocating for nationalization and new taxes. This comes amid ongoing speculation about a possible ANC-EFF coalition following the upcoming elections.
“If a new ruling coalition includes partners who push for nationalization and new taxes, the business sector will withdraw from a successful partnership with the government,” Mavuso told News24. “We are not going to support an administration that is touting policies of mass economic destruction.”
The Economic Freedom Fighters (EFF) have made nationalization a central part of their platform, proposing the nationalization of mines, banks, construction firms, and the Reserve Bank, alongside new taxes targeting the wealthy and corporations.
Over the past year, more than 130 CEOs of South Africa’s largest companies have committed to a business-led initiative to address critical issues in energy, logistics, and security. Key figures such as Sibanye’s Neal Froneman and Remgro’s Jannie Durand have sponsored work streams leading to significant progress. This includes the private sector raising R100 million to help resolve the energy crisis and pushing for the passage of the Electricity Regulation Act, contributing to South Africa reaching over 60 days without load shedding.
“A new administration could actually seek to reverse some of those gains,” Mavuso said, highlighting the achievements made in liberalizing the electricity sector and supporting Eskom. “It would be a shame and it would be unfortunate for our work to be stopped because we still have a lot that we actually need to do.”
Mavuso also emphasized the business sector’s role in developing a road map for freight and logistics, aiding Transnet’s turnaround plan, and enhancing law enforcement capabilities within the National Prosecuting Authority’s (NPA) Investigating Directorate and the Hawks. These efforts are crucial for South Africa’s potential removal from the grey list by January 2025.
Last week, President Cyril Ramaphosa signed the NPA Amendment Bill into law, aiming to establish a corruption-busting unit similar to the former Scorpions. This milestone, strongly advocated for by BLSA, was welcomed by Mavuso.
However, Mavuso criticized Ramaphosa for signing the National Health Insurance (NHI) legislation into law ahead of the election, labeling it as a move to win over voters with promises that might not be fulfilled. She contended that the NHI in its current form is “unworkable, unfundable, and unimplementable” and could cause more harm than good.
As South Africa heads to the polls, the prospect of coalition politics raises concerns about potential large-scale corruption and ineffective governance. “Effective coalitions demand that politicians have a single-minded focus on what would be best for the country, along with a willingness to compromise for the greater socioeconomic good,” Mavuso said. Unfortunately, she noted, coalition politics in South Africa have often resulted in chaotic leadership and failure to deliver basic services.
With the ANC unlikely to secure an outright majority, intense negotiations to form coalitions at both national and provincial levels are expected. Mavuso warned that coalition talks could lead to a new level of national corruption as parties exchange favors for power, potentially resulting in Cabinet positions being filled by individuals lacking the necessary skills.
“The politicians should know that this is about South Africa and the people. It’s not about their narrow, selfish party agenda,” Mavuso stated.
Looking forward, Mavuso stressed that the new administration should focus on encouraging economic growth, which has averaged just 0.8% annually since 2012. Addressing youth unemployment and implementing responsive economic and fiscal policies, regulatory certainty, and efficient public services are critical to avoiding an economic collapse.
As the business sector remains committed to supporting South Africa’s development, Mavuso made it clear that this support hinges on the new administration’s commitment to a reform agenda that promotes business confidence and investment. Without such a commitment, the business sector stands ready to withdraw its crucial support.
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